A federal judge in Utah has weighed in on the water rights battle between rivaling cities Wendover, Utah, and West Wendover, Nev., giving a partial victory to the Utah side.

In his ruling issued Tuesday, U.S. District Judge Ted Stewart ruled a controversial 1992 ordinance passed by West Wendover, forcing all home and property owners in its borders to use its water system, cutting off Wendover's service, is invalid. Wendover had provided water to its Nevada neighbor for more than 70 years.

Specifically, the State Line casino had used Wendover water and under a grandfather clause in the ordinance, continued its water service until 2002, when the casino was sold. Utah-side officials alleged that West Wendover City had threatened to yank the casino's state liquor and business licenses if they did not switch.

The change proved a huge financial impact to Wendover, which does not benefit from the majority of casino income earned by West Wendover. The loss of State Line alone resulted in a $90,000 a year loss for the Utah side. The loss forced city officials to refinance several city bonds that depended on the income.

The situation prompted Wendover to file suit against West Wendover in 2003.

In his ruling, Stewart found that West Wendover officials were mainly motivated by money. "This is a situation where a local government is using its regulatory power to favor itself by prohibiting out-of-state competitors," Stewart wrote.

The judge noted at one point, West Wendover officials claimed the ordinance was done in part over health and water quality concerns. "The difficulty with this argument is that there is no allegation that plaintiff's water supply was somehow unhealthy or unsafe. In fact, there is evidence to suggest that defendants' water system is less reliable and contains more silica than plaintiff's system," the judge wrote.

Wendover had asked the court for punitive damages. Stewart said he had to apply Nevada law, and under that law West Wendover and its officials were immune from punitive damages.

But the door is left open for Wendover to collect compensation. Stewart left several issues unresolved, leaving the need for further hearings and possible trial if the two cities cannot reach a settlement.

Wendover Mayor Steve Perry told the Deseret Morning News that he is happy to hear that his city prevailed in part. "I'm glad to hear that he's ruled that their ordinance was made specifically for them to justify going after money," Perry said, adding he is disappointed his city will not be able to go after punitive damages.

"I'm sure we're going to push forward at this point," Perry said, once city attorneys have a chance to read through the ruling.

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E-mail: gfattah@desnews.com